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The Principles of the Long Tail


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Winetta Lee's Presentation "The Basic Principles of the Long Tail" looks at Chris Anderson's theory of the Long Tail. The presentation explains the 80/20 rule, what happens when the market moves from scarcity to abundance and what the Long Tail means for the entertainment industry.

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The Principles of the Long Tail

  1. 1. PUB 355 The Concept of the Long Tail Theory<br />Presented <br />by <br />Winetta Lee<br />
  2. 2. Chris Anderson<br />Initially, Anderson was the U.S. business editor of The Economist<br />In 2001, Anderson became the editor in chief of Wired Magazine<br />In 2004, Anderson wrote a blog on the Long Tail Theory<br />In 2006, Anderson’s blog on The Long Tail later expanded into a book titled…<br />
  3. 3. The Long Tail: Why the Future of Business Is Selling Less of More<br />
  4. 4. Pareto Principle – 80/20 Rule<br />
  5. 5. The “Hits”<br />What happens to these “misses” in the marketplace?...<br />
  6. 6. The Economics of Scarcity<br />According to Anderson, the 20th century entertainment industry was all about the “hits”<br />Hit-Driven Economy: “A creation of an age without enough room to carry everything for everybody” (Anderson, Pg. 2, 2004)<br />Therefore, the lack of physical space to carry all the “hits” and even “misses” leads to the Economics of Scarcity <br />
  7. 7. The World of Abundance<br />With online distribution, products are no longer limited by physical shelf space<br />According to Anderson, “the 21st century will be equally about the misses” (Anderson, 2004, Pg. 1) <br />Companies such as Netflix, Amazon and Rhapsody have recognized this growing demand for niche market items and alternative selections that they are profiting from these “misses” in the marketplace<br />
  8. 8. The Long Tail<br />
  9. 9. The Power of The Long Tail<br /> New rules for the New Entertainment Industry:<br />Rule 1: Make everything available<br />Rule 2: Cut the price in half. Now lower it. <br />Rule 3: Help me find it<br />The Benefits of the Long Tail:<br />Adds more diversity to our marketplace<br />Reduces the issue of Economics of Scarcity<br />Deters us from a “Hit”-driven economy<br />
  10. 10. THE END<br />Thanks for Listening!!!<br />